The VR Market
At Boost VC, we invest in founders in a way where we get to track entire communities very closely. One of those communities is Virtual Reality.
Boost VC has invested in nearly 70 VR startups over the last 5 years. More than any investor I can think of. This probably gives us the best data set on where the market is (Facebook probably has a fairly good data set too).
There is something counter-intuitive happening in the VR market — the more valuable the Virtual Reality market becomes, the less valuable venture investors seem to believe it is. They are investing and getting discounts to the startups, rather than paying the premium they probably should be paying.
Virtual Reality is here. There are products that are clear winners in the market, growing at faster paces than most companies in more mass market technologies… and VR companies MAKE $$$$$.
I believe there are a few reasons for this counter-intuitive reaction from investors:
The VR market has had 4 false starts, and lots of people have lost money in previous VR moments
The Oculus Quest is the only platform growing fast
The market is still contains fewer than 10m headsets
However, if these are the reasons, shouldn’t VR companies be getting a premium? The retention on VR is growing as fast as the growth of downloads. The market size is a known quantity now, and we also know how much Apple and Facebook are pouring into the space in order to control the next platform.
It feels to me that if there’s a company that is making money and growing fast in VR, it should get a premium price, because the market is still small, and it is a certainty that it will be large! So the top product/gaming brands in Virtual Reality are going to be the top brands in the world at some point.
There, that’s the end of my Virtual Reality rant. I think that VR has gone over-looked for too long, and wanted to write a post about it. But either way, Boost VC will continue to invest - so apply to Boost VC if you’re interested!!!